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Geopolitical Risk, Financial Development, and CO2 Emissions in BRICS: A Dual-Channel Analysis

Author

Listed:
  • Trabelsi, Walid

    (Higher School of Business of Tunis, University of Manouba, Manouba, Tunisia,)

  • Gabsi, Chaker

    (Higher School of Science and Technology in Hammam Sousse, University of Sousse, Sousse, Tunisia.)

  • Chebbi, Eya

    (Higher School of Business of Tunis, University of Manouba, Manouba, Tunisia,)

  • Mensi, Sami

    (Higher School of Business of Tunis, University of Manouba, Manouba, Tunisia,)

Abstract

In the face of the global climate emergency, understanding the factors influencing CO? emissions has become essential for guiding environmental policies. This paper examines the effect of geopolitical risk and financial development on CO? emissions in BRICS countries between 1990 and 2023. To this end, we use Caldara and Iacoviello's GPR index (2022) and three financial indicators (private sector credit, bank credit, domestic credit). The reveals that geopolitical risk and financial development, estimated separately, help to reduce emissions. On the other hand, their interaction has a significant and positive effect, suggesting that financial development exacerbates the environmental impact of geopolitical risk. These results highlight the need to strengthen the supervision of financial flows during periods of instability to avoid an aggravating effect on CO? emissions.

Suggested Citation

  • Trabelsi, Walid & Gabsi, Chaker & Chebbi, Eya & Mensi, Sami, 2026. "Geopolitical Risk, Financial Development, and CO2 Emissions in BRICS: A Dual-Channel Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 16(2), pages 953-966, January.
    • Handle: RePEc:eco:journ2:v:16:y:2026:i:2:id:22809
    DOI: 10.32479/ijeep.22809
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